For which of the following costs is a static budget most appropriate?

Question

Quizplus · Accepted Answer

A static budget is most appropriate for fixed overhead costs. This is because fixed overhead costs remain the same regardless of changes in production levels, so a budget can be set in advance and used as a benchmark for performance evaluation. Controllable costs, manufacturing costs, and variable overhead costs are all subject to fluctuations based on changes in production levels or other factors, making a flexible budget more appropriate.

For Which of the Following Costs Is a Static Budget